SIMON BIRMINGHAM: BHP Billiton’s indefinite deferral of the Olympic Dam project is potentially the most devastating blow to business confidence in South Australia since the State Bank disaster of the 1990s and this is a blow that potentially could have been avoided. Just a couple of months ago, BHP CEO Marius Kloppers was citing the carbon tax as a direct contribution to higher operating costs in Australia. Just three months or so ago, BHP chairman Jac Nasser was citing the higher business costs in Australia and tax uncertainty as things that were threatening and risking business investment. We had very clear evidence in the run up to yesterday’s decision – that has seen the indefinite deferral of a $30 billion project, the potential loss of 13,000 jobs – that the Government policies certainly did not help, and definitely did hurt, the prospects of this project going ahead. The best way to see this project go ahead in the future will be to create a lower cost business environment in Australia, a lower cost environment without a carbon tax, without a mining tax, without union militancy, with the type of environment that gives companies like BHP Billiton the certainty to invest here rather than deciding to prefer investment in lower cost countries elsewhere.
JOURNALIST: But BHP said the mining tax [unclear] decision.
SIMON BIRMINGHAM: BHP have cited for months, as I’ve said, the mining tax, the carbon tax, in particular, as higher costs. The reality is that BHP Billiton will be paying tens if not hundreds of millions of dollars a year extra because of the carbon tax, even more than that as a result of the mining tax. They will be paying enormous additional taxes – funds that could have gone into investing in the Olympic Dam project. The Olympic Dam project would have only seen their carbon tax liability increase even further, so it’s little wonder, and if you look at their statement, they say they have to choose the projects that have the best possible chance of returns. They are making global decisions between different projects and things like the carbon tax in Australia make projects like Olympic Dam less competitive than overseas projects are.
JOURNALIST: They’ve cited much wider global economic reasons [unclear]
SIMON BIRMINGHAM: Sure. They’ve cited global commodity prices which is a real factor, for sure. There are obviously demand issues for them to consider, but the carbon tax and the mining tax make it harder to get projects like Olympic Dam off the ground. If you want to give this project the best chance of success in the future, you would axe the carbon tax, axe the mining tax and create a more competitive environment in Australia.
JOURNALIST: Some analysts are claiming that our mining boom has come and gone. Could that be a factor as well?
SIMON BIRMINGHAM: There is no doubt that there is a concern there as to whether we’re going to see the same level of growth that we’ve seen in the past but Australia is competing in a global market. We need to make sure that, when investment decisions are made by global companies like BHP Billiton, they’re not looking at Australia as being the most expensive option on the table. Australia needs to strive to be the most competitive option on the table wherever possible and the tax regime here plays a big, big part in that. Jac Nasser has said that. Marius Kloppers has said that. The warning signs were there that they didn’t like what this Government was doing to the tax regime. Now we’re paying a price for it.